Correlation Between Sun Life and UNIVMUSIC GRPADR050
Can any of the company-specific risk be diversified away by investing in both Sun Life and UNIVMUSIC GRPADR050 at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sun Life and UNIVMUSIC GRPADR050 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Life Financial and UNIVMUSIC GRPADR050, you can compare the effects of market volatilities on Sun Life and UNIVMUSIC GRPADR050 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sun Life with a short position of UNIVMUSIC GRPADR050. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and UNIVMUSIC GRPADR050.
Diversification Opportunities for Sun Life and UNIVMUSIC GRPADR050
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and UNIVMUSIC is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial and UNIVMUSIC GRPADR050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVMUSIC GRPADR050 and Sun Life is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sun Life Financial are associated (or correlated) with UNIVMUSIC GRPADR050. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIVMUSIC GRPADR050 has no effect on the direction of Sun Life i.e., Sun Life and UNIVMUSIC GRPADR050 go up and down completely randomly.
Pair Corralation between Sun Life and UNIVMUSIC GRPADR050
Assuming the 90 days horizon Sun Life Financial is expected to generate 1.01 times more return on investment than UNIVMUSIC GRPADR050. However, Sun Life is 1.01 times more volatile than UNIVMUSIC GRPADR050. It trades about 0.23 of its potential returns per unit of risk. UNIVMUSIC GRPADR050 is currently generating about 0.04 per unit of risk. If you would invest 5,520 in Sun Life Financial on September 13, 2024 and sell it today you would earn a total of 280.00 from holding Sun Life Financial or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Life Financial vs. UNIVMUSIC GRPADR050
Performance |
| Timeline |
| Sun Life Financial |
| UNIVMUSIC GRPADR050 |
Sun Life and UNIVMUSIC GRPADR050 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and UNIVMUSIC GRPADR050
The main advantage of trading using opposite Sun Life and UNIVMUSIC GRPADR050 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life position performs unexpectedly, UNIVMUSIC GRPADR050 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in UNIVMUSIC GRPADR050 will offset losses from the drop in UNIVMUSIC GRPADR050's long position.| Sun Life vs. Playa Hotels Resorts | Sun Life vs. PLAYTIKA HOLDING DL 01 | Sun Life vs. KOOL2PLAY SA ZY | Sun Life vs. Singapore Airlines Limited |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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